NOVAVAX INC (Form: 10-Q, Received: 08/06/2010 16:32:09)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 0-26770

NOVAVAX, INC.

(Exact name of registrant as specified in its charter)

Delaware		22-2816046
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9920 Belward Campus Drive, Rockville, MD		20850
(Address of principal executive offices)		(Zip code)

(240) 268-2000

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨

Accelerated filer x

Non-accelerated filer ¨

(Do not check if a smaller reporting company)

Smaller reporting company ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of the Registrant’s Common Stock, $0.01 par value, was 107,357,945 as of July 31, 2010.

NOVAVAX, INC.

TABLE OF CONTENTS

		Page No.

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009	1

	Consolidated Statements of Operations for the three and six months ended June 30, 2010 and 2009 (unaudited)	2

	Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009 (unaudited)	3

	Notes to the Consolidated Financial Statements (unaudited)	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18

Item 4.	Controls and Procedures	18

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	19

Item 1A.	Risk Factors	19

Item 5.	Other Information	19

Item 6.	Exhibits	19

SIGNATURES		21

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NOVAVAX, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share information)

	June 30,			December 31,
	2010			2009
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	9,446		$	38,757
Short-term investments available-for-sale		17,340			4,193
Accounts and other receivables		356			258
Prepaid expenses and other current assets		452			1,295
Total current assets		27,594			44,503
Property and equipment, net		8,050			7,801
Goodwill		33,141			33,141
Other non-current assets		160			160
Total assets	$	68,945		$	85,605

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,433		$	2,098
Accrued expenses and other current liabilities		4,637			5,417
Current portion of notes payable		80			80
Deferred revenue		54			150
Deferred rent		319			282
Total current liabilities		8,523			8,027
Non-current portion of notes payable		360			406
Deferred rent		2,539			2,707
Total liabilities		11,422			11,140

Commitments and contingences		—			—
Stockholders’ equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.01 par value, 200,000,000 shares authorized; and 102,313,902 shares issued and 101,846,805 shares outstanding at June 30, 2010 and 100,717,890 shares issued and 100,262,460 shares outstanding at December 31, 2009		1,023			1,007
Additional paid-in capital		354,776			350,810
Notes receivable from former directors		(1,572	)		(1,572	)
Accumulated deficit		(294,988	)		(274,150	)
Treasury stock, 467,097 and 455,430 shares at June 30, 2010 and December 31, 2009, respectively, cost basis		(2,450	)		(2,450	)
Accumulated other comprehensive income		734			820
Total stockholders’ equity		57,523			74,465
Total liabilities and stockholders’ equity	$	68,945		$	85,605

The accompanying notes are an integral part of these consolidated financial statements.

NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share information)

(unaudited)

	For the Three Months Ended June 3 0 ,						For the Six Months Ended June 3 0 ,
	2010			2009			2010			2009

Revenue	$	7		$	29		$	117		$	50

Operating expenses:
Research and development		6,327			5,297			15,356			9,563
General and administrative		3,148			2,562			5,683			5,454
Total operating expenses		9,475			7,859			21,039			15,017
Loss from continuing operations		(9,468	)		(7,830	)		(20,922	)		(14,967	)
Other income (expense):
Interest income		44			75			88			180
Interest expense		(2	)		(326	)		(4	)		(764	)
Impairment of short-term investments		—			(459	)		—			(1,338	)
Net loss	$	(9,426	)	$	(8,540	)	$	(20,838	)	$	(16,889	)

Basic and diluted net loss per share	$	(0.09	)	$	(0.10	)	$	(0.21	)	$	(0.22	)

Basic and diluted weighted average number of common shares outstanding		100,694			84,832			100,442			76,807

The accompanying notes are an integral part of these consolidated financial statements.

NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	For the Six Months Ended June 3 0 ,
	2010			2009
Operating Activities:
Net loss:	$	(20,838	)	$	(16,889	)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization		633			602
Amortization of debt discount		—			218
Amortization of deferred financing costs		—			145
Amortization of short-term investments discount(premium)		66			—
Loss on disposal of property and equipment		—			28
Impairment of property and equipment		127			21
Deferred rent		(131	)		(137	)
Non-cash stock-based compensation		509			854
Impairment of short-term investments		—			1,338
Changes in operating assets and liabilities:
Accounts and other receivables		(98	)		236
Prepaid expenses and other current assets		843			(45	)
Accounts payable and accrued expenses		258			(398	)
Deferred revenue		(96	)		—
Net cash used in operating activities		(18,727	)		(14,027	)

Investing Activities:
Capital expenditures		(712	)		(168	)
Proceeds from disposal of property and equipment		—			7
Proceeds from maturities of short-term investments		900			125
Purchases of short-term investments		(14,199	)		—
Net cash used in investing activities		(14,011	)		(36	)

Financing Activities:
Principal payments of notes payable		(46	)		(12,346	)
Net proceeds from sales of common stock, net of offering costs of $0.1 million and $1.0 million, respectively		3,060			24,652
Proceeds from the exercise of stock options		413			35
Net cash provided by financing activities		3,427			12,341
Net decrease in cash and cash equivalents		(29,311	)		(1,722	)
Cash and cash equivalents at beginning of period		38,757			26,938
Cash and cash equivalents at end of period	$	9,446		$	25,216

Supplemental disclosure of non-cash activities:
Equipment purchases included in accounts payable	$	297		$	84
Payment of notes payable through issuance of common stock	$	—		$	5,100

Supplemental disclosure of cash flow information:
Cash interest payments	$	—		$	761

The accompanying notes are an integral part of these consolidated financial statements.

NOVAVAX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2010

Note 1 – Organization

Novavax, Inc. (the “Company”), is a clinical-stage biopharmaceutical company focused on developing novel, highly potent recombinant vaccines. These vaccines leverage the Company’s virus-like-particle (“VLP”) platform technology coupled with a unique disposable production technology. VLPs are genetically engineered three-dimensional nanostructures, which incorporate immunologically important lipids and recombinant proteins. The Company’s VLPs resemble a live virus, but lack the genetic material to replicate the virus, and its proprietary production technology uses insect cells rather than chicken eggs or mammalian cells. The Company’s current product targets include vaccines against pandemic influenza (including H5N1 and H1N1 pandemic strains), seasonal influenza, Respiratory Syncytial Virus (“RSV”) and Varicella Zoster Virus (“VZV”), which causes shingles.

In 2009, the Company formed a joint venture (the “JV”) with Cadila Pharmaceuticals Ltd. (“Cadila”) named CPL Biologicals Private Limited to develop and manufacture vaccines, biological therapeutics and diagnostics in India. The Company owns 20% of the JV, and Cadila owns the remaining 80%.

Note 2 – Liquidity Matters

Since its inception, the Company has incurred, and continues to incur, significant losses from operations. At June 30, 2010, the Company had cash and cash equivalents of $9.4 million and short-term investments with a fair value of $17.3 million. Since June 30, 2010 through August 5, 2010, the Company has sold additional shares of common stock under its At Market Issuance Sales Agreement, discussed below, at an average sales price of $2.24 per share, resulting in $13.5 million in net proceeds.

The Company’s vaccine product candidates currently under development will require significant additional research and development efforts, including extensive pre-clinical and clinical testing, and regulatory approval, prior to commercial use. The Company’s research and development efforts may not be successful and any potential product candidates may not prove to be safe and effective in clinical trials. Even if developed, these vaccine product candidates may not receive regulatory approval or be successfully introduced and marketed at prices that would permit the Company to operate profitably. The commercial launch of any vaccine product candidate is subject to significant risks including, but not limited to, manufacturing scale-up and market acceptance.

Based on the Company’s cash, cash equivalents and short-term investments balances as of June 30, 2010, anticipated proceeds from sales of the Company’s common stock under its At Market Issuance Sales Agreement with McNicoll, Lewis & Vlak LLC (“MLV”) and its current business operations, the Company believes it will have adequate capital resources available to operate at planned levels for at least the next twelve months. Additional capital will be required in the future to develop its product candidates through clinical trials and commercialization. The Company’s ability to raise funds under its At Market Issuance Sales Agreement is subject to market conditions. Further, the Company will seek additional capital through public or private equity offerings, debt financing, strategic alliance and licensing arrangements, government contracts, collaborative arrangements, or some combination of these financing alternatives. Any capital raised by an equity offering, whether public or private, will likely be substantially dilutive to the existing stockholders and any licensing or development arrangement may require the Company to give up rights to a product or technology at less than its full potential value. The Company has not secured any additional commitments for new financing nor can the Company provide any assurance the Company’s financing will be available on commercially acceptable terms, if at all. If the Company is unable to obtain additional capital, it will assess its capital resources and will likely be required to delay, reduce the scope of, or eliminate one or more of its product research and development programs, and/or downsize the organization, including its general and administrative infrastructure.

Note 3 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated balance sheet as of June 30, 2010, consolidated statements of operations for the three and six months ended June 30, 2010 and 2009 and the consolidated statements of cash flows for the six months ended June 30, 2010 and 2009 are unaudited, but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, operating results and cash flows, respectively, for the periods presented. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Fielding Pharmaceutical Company. All significant intercompany accounts and transactions have been eliminated in consolidation.

Results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

Fair Value Measurements

The Company adopted ASC 820, Fair Value Measurements and Disclosures , for financial assets and liabilities on January 1, 2008. The Company adopted ASC 820 for non-financial assets and liabilities on January 1, 2009.

ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

Financial assets and liabilities measured at fair market value on a recurring basis as of June 30, 2010 are summarized below (in thousands):

	Fair Value Measurement at June 30, 2010 using Fair Value Hierarchy
Assets	Level 1		Level 2		Level 3		Fair Value
Cash and cash equivalents	$	9,446	$	—	$	—	$	9,446
Short-term investments		—		17,340		—		17,340
Total	$	9,446	$	17,340	$	—	$	26,786

The amounts in the Company’s consolidated balance sheet for accounts and other receivables, accounts payable and notes payable approximate fair value due to their short-term nature.

Short-Term Investments

Short-term investments at June 30, 2010 consist of investments in commercial paper, corporate notes and three auction rate securities. The auction rate securities have a par value of $5.1 million. The Company has classified these securities as available-for-sale since the Company may need to liquidate these securities within the next year. The available-for-sale securities are carried at fair value and unrealized gains and losses, if determined to be temporary, on these securities are included in accumulated other comprehensive income (loss) in stockholders’ equity. Investments available for sale are evaluated periodically to determine whether a decline in value is “other-than-temporary.” The term “other-than-temporary” is not intended to indicate a permanent decline in value. Rather, it means that the prospects for a near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. Management reviews criteria, such as the magnitude and duration of the decline, as well as the Company’s ability to hold the securities until market recovery, to predict whether the loss in value is other-than-temporary. If a decline in value is determined to be other-than-temporary, the value of the security is reduced and the impairment is recorded in the consolidated statements of operations. The specific identification method is used in computing realized gains and losses on sale of the Company’s securities.

Short-term investments classified as available-for-sale as of June 30, 2010 were comprised of (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Auction rate securities	$	3,373	$	747	$	—		$	4,120
Corporate debt securities		13,233		—		(13	)		13,220
Total	$	16,606	$	747	$	(13	)	$	17,340

Net Loss per Share

Net loss per share is computed using the weighted average number of shares of common stock outstanding. All outstanding warrants, stock options and unvested restricted stock awards totaling 9,393,368 shares and 9,791,647 shares at June 30, 2010 and 2009, respectively, are excluded from the computation, as their effect is antidilutive.

Comprehensive Income (Loss)

The Company accounts for comprehensive income (loss) as prescribed by ASC 220, Comprehensive Income . Comprehensive income (loss) is the total net income (loss) plus all changes in equity during the period except those changes resulting from investment by and distribution to owners. Total comprehensive loss, including unrealized gains (losses) on the Company’s short-term investments available-for-sale, was $9.4 million and $8.1 million for the three months ended June 30, 2010 and 2009, respectively. Total comprehensive loss, including unrealized gains (losses) on the Company’s short-term investments available-for-sale, was $20.9 million and $16.4 million for the six months ended June 30, 2010 and 2009, respectively.

Recent Accounting Pronouncements Not Yet Adopted

In September 2009, ASU 2009-13, Revenue Recognition (Topic 605)— Multiple-Deliverable Revenue Arrangements , was issued and will change the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. Specifically, this guidance amends the criteria in Subtopic 605-25, Revenue Recognition — Multiple-Element Arrangements, for separating consideration in multiple-deliverable arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) estimates. This guidance also eliminates the residual method of allocation and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. In addition, this guidance significantly expands required disclosures related to a vendor’s multiple-deliverable revenue arrangements. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The impact of ASU 2009-13 on the Company’s consolidated financial statements will depend on the nature and terms of its revenue arrangements entered into or materially modified after the adoption date. However, based on the Company’s current customer arrangements, the Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements.

In March 2010, ASU 2010-17, Revenue Recognition—Milestone Method (Topic 605) : Milestone Method of Revenue Recognition—a consensus of the FASB Emerging Issues Task Force , was issued and will amend the accounting for revenue arrangements under which a vendor satisfies its performance obligations to a customer over a period of time, when the deliverable or unit of accounting is not within the scope of other authoritative literature and when the arrangement consideration is contingent upon the achievement of a milestone. The amendment defines a milestone and clarifies whether an entity may recognize consideration earned from the achievement of a milestone in the period in which the milestone is achieved. This amendment is effective on a prospective basis for milestones achieved on or after January 1, 2011, with early adoption permitted. The amendment may be applied retrospectively to all arrangements or prospectively for milestones achieved after the effective date. The Company expects to prospectively apply the amended guidance to milestones achieved on or after January 1, 2011. The new guidance is consistent with the Company’s current revenue recognition policies for arrangements with milestones. As a result, the Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements.

Note 4 – Stock-Based Compensation

Under the Company’s stock-based compensation plan, the 2005 Stock Incentive Plan (the “2005 Plan”), equity awards may be granted to officers, directors, employees, consultants and advisors to the Company and any present or future subsidiary. The 2005 Plan currently authorizes the grant of equity awards for up to 11,312,192 shares of common stock, which included, at the time of approval of the 2005 Plan, a maximum 5,746,468 shares of common stock subject to stock options outstanding under the Company’s 1995 Stock Option Plan (the “1995 Plan”) that may revert to and become issuable under the 2005 Plan if such options should expire or otherwise terminate unexercised. The term of the Company’s previous stock-based compensation plan, the 1995 Plan, has expired. Outstanding stock options remain in existence in accordance with their terms and no new awards will be made under the 1995 Plan. The Company’s 1995 Director Stock Option Plan (the “1995 Director Plan”) has expired, and no stock options under this plan remain outstanding at June 30, 2010.

The Company recorded stock-based compensation expense in the consolidated statements of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Research and development	$	77	$	158	$	8	$	337
General and administrative		348		199		501		517
Total stock-based compensation expenses	$	425	$	357	$	509	$	854

During the three months ended March 31, 2010, the Company recorded a stock-based compensation benefit of ($0.1) million due to the reversal of previously recognized expense for unvested stock options that were cancelled due to employees leaving the Company.

Stock Options Awards

The following is a summary of option activity under the 2005 Plan, the 1995 Plan and the 1995 Director Plan for the six months ended June 30, 2010:

	2005 Stock Incentive Plan					1995 Stock Option Plan					1995 Director Stock Option Plan
	Stock Options			Weighted- Average Exercise Price		Stock Options			Weighted- Average Exercise Price		Stock Options			Weighted- Average Exercise Price
Outstanding at January 1, 2010		4,878,675		$	2.38		1,086,319		$	5.72		30,000		$	5.63
Granted		1,491,250		$	2.39		—		$	—		—		$	—
Exercised		(193,675	)	$	1.62		(45,000	)	$	2.21		—		$	—
Canceled		(781,057	)	$	2.67		(461,469	)	$	7.04		(30,000	)	$	5.63
Outstanding at June 30, 2010		5,395,193		$	2.37		579,850		$	4.97		—		$	—
Shares exercisable at June 30, 2010		2,450,630		$	2.20		579,850		$	4.97		—		$	—

Shares available for grant at June 30, 2010		2,480,523

The fair value of stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2010	2009	2010	2009
Weighted-average fair value of stock options granted	$1.68	$1.91	$1.64	$0.46
Risk-free interest rate	1.47%-2.33%	2.09%-3.19%	1.46%-2.89%	1.56%-3.19%
Dividend yield	0%	0%	0%	0%
Volatility	98.78%-108.02%	100.36%-111.83%	98.78%-108.02%	85.68%-111.83%
Expected life (in years)	3.06-4.47	4.17-7.05	3.06-6.26	4.00-7.05
Expected forfeiture rate	21.07%	21.96%	21.07%	21.96%

The aggregate intrinsic value and weighted-average remaining contractual term of stock options outstanding as of June 30, 2010 was approximately $1.9 million and 7.1 years, respectively. The aggregate intrinsic value and weighted-average remaining contractual term of stock options exercisable as of June 30, 2010 was approximately $1.3 million and 5.5 years, respectively. The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2010. This amount is subject to change based on changes to the fair value of the Company’s common stock. The aggregate intrinsic value of options exercised for the six months ended June 30, 2010 and 2009 was $0.3 million and less than $0.1 million, respectively.

Restricted Stock Awards

Under the 2005 Plan, the Company has granted restricted stock awards subject to certain performance-based and time-based vesting conditions which, if not met, would result in forfeiture of the shares and reversal of any previously recognized related stock-based compensation expense.

The following is a summary of restricted stock awards activity for the six months ended June 30, 2010:

	Number of Shares			Per Share Weighted- Average Grant-Date Fair Value
Outstanding at January 1, 2010		90,000		$	3.04
Restricted stock granted		25,000		$	2.38
Restricted stock vested		(28,333	)	$	2.77
Restricted stock forfeited		(11,667	)	$	2.77
Outstanding at June 30, 2010		75,000		$	2.97

As of June 30, 2010, there was approximately $3.0 million of total unrecognized compensation expense (net of estimated forfeitures) related to unvested options and restricted stock awards. This unrecognized compensation expense is expected to be recognized over a weighted-average period of 1.6 years. This estimate does not include the impact of other possible stock-based awards that may be made during future periods.

Note 5 – At Market Issuance Sales Agreement

On March 15, 2010, the Company terminated its previous At Market Issuance Sales Agreements entered into in 2009 with Wm Smith & Co. and entered into a new sales agreement with MLV, as sales agent, under which the Company may sell an aggregate of $50 million in gross proceeds of its common stock. The Company’s Board of Directors has authorized the sale of up to 25 million shares of the Company’s common stock pursuant to this agreement. The shares of common stock are being offered pursuant to a shelf registration statement filed with the SEC. During the second quarter ended June 30, 2010, the Company sold 1.3 million shares at an average sales price of $2.34 per share, resulting in $3.1 million in net proceeds. Since June 30, 2010 through August 5, 2010, the Company has sold an additional 6.2 million shares at an average sales price of $2.24 per share, resulting in $13.5 million in net proceeds.

Note 6 – Related Party Transactions

Mr. Lambert, a current member of the Company’s Board of Directors and its former Executive Chairman, had a consulting agreement with the Company, pursuant to which he assisted the Company with issues regarding the development and commercialization of its vaccine product candidates and assisted with business development predominantly in the international markets. During the six months ended June 30, 2010, the Company incurred an expense of $41,398 for these services. On March 8, 2010, Mr. Lambert’s consulting agreement expired by its original terms. In June 2010, the Company entered into a new consulting agreement with Mr. Lambert, pursuant to which, as of April 1, 2010, he acts as a Novavax representative on the board of directors of CPL Biologicals Private Limited. During the three months ended June 30, 2010, the Company incurred $17,250 for these services, which is to be fully reimbursed by the JV.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements contained or incorporated by reference herein constitute forward-looking statements. In some cases, these statements can be identified by the use of forward-looking terminology such as “expect(s)”, “intends”, “plans”, “seeks”, “estimates”, “could”, “should”, “feel(s)”, “believe(s)”, “will”, “would”, “may”, “can”, “anticipate(s)”, “potential” and similar expressions or the negative of these terms. Such forward-looking statements are subject to risks and uncertainties that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from those expressed or implied by such forward-looking statements. We refer you to item 1A Risk Factors in this Quarterly Report, as well as our Annual Report on Form 10-K for the year ended December 31, 2009, which we incorporate herein by reference, for identification of important factors with respect to risks and uncertainties.

Forward-looking statements in this Quarterly Report include, without limitation, statements regarding:

our expectation that we will have adequate capital resources available to operate at planned levels for at least the next twelve months;

our expectations for future funding requirements and capital raising activity, including anticipated proceeds from our At Market Issuance Sales Agreement with MLV;

our expectations on financial or business performance, conditions or strategies and other financial and business matters, including expectations regarding operating expenses, use of cash, and the fluctuations in expenses and capital requirements associated with pre-clinical studies, clinical trials and other research and development activities;

our expectations on clinical development and anticipated milestones, including a Department of Health and Human Services (HHS), Biomedical Advanced Research and Development Authority (BARDA) contract and pursuing possible registration of our H1N1 influenza VLP vaccine in the country of Mexico;

	·	our expectations that our trivalent seasonal influenza VLP vaccine could potentially address an unmet medical need in older adults;
	·	the expected timing of the primary safety results from our second stage clinical trial of our 2009 H1N1 influenza VLP vaccine in Mexico;

our expectations for the use of results from our clinical trial in Mexico to support registration of our 2009 H1N1 influenza VLP vaccine in Mexico and the development of vaccines in other countries, including the United States;

our expectations for the use of pre-clinical safety and efficacy studies to support Investigational New Drug (IND) application;

the impact of new accounting pronouncements; and

our expectations concerning payments under existing license agreements.

Factors that may cause actual results to differ materially from the results discussed in the forward-looking statements or historical experience include, among others, the following:

our ability to progress any product candidates into pre-clinical studies or clinical trials;

the scope, initiation, rate and progress of our pre-clinical studies and clinical trials and other research and development activities;

clinical trial results;

even with positive data from pre-clinical studies or clinical trials, the product candidate may not prove to be safe and efficacious;

regulatory approval is needed before any vaccines can be sold in or outside the United States and, to date, no governmental authority has approved any of our vaccine candidates for sale;

influenza is seasonal in nature, and if approval or commercial launch after approval is not timely in relation to the influenza season, we may not be able to manufacture or sell our influenza vaccines on terms favorable to us until the next influenza season, if at all;

we have not manufactured any of our vaccine candidates at a commercial level;

we utilize a unique manufacturing process and the scale-up of that process may prove difficult and/or costly;

our dependence on third parties to manufacture and distribute our vaccines;

risks associated with conducting business outside of the United States;

the cost and our ability of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

competition for clinical resources and patient enrollment from drug candidates in development by other companies with greater resources and visibility;

our ability to enter into future collaborations with industry partners and the terms, timing and success of any such collaboration;

our ability to obtain adequate financing in the future through product licensing, co-promotional arrangements, public or private equity or debt financings or otherwise;

our ability to win any government contracts/grants, including from BARDA, in a timely manner or at all; and

other factors referenced herein.

The Company assumes no obligation to update any such forward-looking statements, except as specifically required by law. We caution readers not to place considerable reliance on the forward-looking statements contained in this Quarterly Report.

Overview

Novavax, Inc., a Delaware corporation (“Novavax,” the “Company,” “we,” or “us”), was incorporated in 1987, and is a clinical-stage biopharmaceutical company focused on developing novel, highly potent recombinant vaccines. These vaccines leverage our virus-like-particle (VLP) platform technology coupled with a unique disposable production technology.

VLPs are genetically engineered three-dimensional nanostructures, which incorporate immunologically important lipids and recombinant proteins. Our VLPs resemble a live virus, but lack the genetic material to replicate the virus and our proprietary production technology uses insect cells rather than chicken eggs or mammalian cells. Our current product targets include vaccines against pandemic influenza (including the H5N1 and H1N1 pandemic strains), seasonal influenza, Respiratory Syncytial Virus (RSV) and Varicella Zoster Virus (VZV), which causes shingles.

We are conducting a two-stage clinical trial of our 2009 H1N1 influenza VLP vaccine in Mexico in collaboration with Laboratorio Avi-mex S.A. de C.V. and GE Healthcare. The randomized blinded, placebo-controlled clinical trial is designed to evaluate the safety and immunogenicity of our 2009 H1N1 influenza VLP vaccine in healthy adults. We completed enrollment of the first stage and reported positive results on the vaccine’s safety and immunogenicity in the first 1,000 subjects. Due to the favorable results from the first stage, we initiated the second stage of the trial to evaluate the safety of the vaccine in a larger cohort and completed enrollment of more than 3,500 subjects. The primary safety results from the second stage of the trial are expected later in 2010. All of the results will be used to pursue possible registration of our 2009 H1N1 influenza VLP vaccine in the country of Mexico. These data are also expected to support development of our pandemic and seasonal influenza VLP vaccines in other countries, including the United States.

In March 2010, we released final results of the Phase II trial in healthy adults immunized with our trivalent seasonal influenza VLP vaccine, for which we completed enrollment in May 2009. The results showed the vaccine was well-tolerated and immunogenic.

In April 2010, we reported the results of the Phase II trial in older adults (60 years or higher in age) in a dose-ranging study comparing our trivalent seasonal influenza VLP vaccine with a commercially available inactivated trivalent influenza vaccine (TIV), for which we completed enrollment in November 2009. Our report indicated that the vaccine was both safe and immunogenic against the 2009-2010 seasonal influenza virus strains in older adults. The Center for Disease Control and Prevention (CDC) has indicated that currently approved seasonal influenza vaccines have shown to be only 30% to 70% effective in preventing hospitalization for pneumonia and influenza in older adults; however, we believe that our trivalent seasonal influenza VLP vaccine has the potential to address this unmet medical need.

We have also developed vaccine candidates for both RSV and VZV. We completed a pre-clinical safety and efficacy study of our RSV vaccine in cotton rats; the results of which will be used to support an Investigational New Drug application, which we expect to file in 2010. Our VZV vaccine candidate induced antibody and T-cell responses, and we plan on moving forward with further pre-clinical development in 2010.

HHS has determined our BARDA proposal to provide recombinant influenza vaccines and manufacturing capabilities for pandemic preparedness is in the competitive range for award of an advanced development contract. We submitted our proposal in September 2009 in response to United States Government RFP solicitation number HHS BARDA-09-32 for the advanced development of recombinant influenza vaccines in a U.S.-based manufacturing facility.

Our vaccine product candidates currently under development will require significant additional research and development efforts, including extensive pre-clinical and clinical testing, and regulatory approval, prior to commercial use. Our research and development efforts may not be successful and any potential product candidates may not prove to be safe and effective in clinical trials. Even if developed, these vaccine product candidates may not receive regulatory approval or be successfully introduced and marketed at prices that would permit us to operate profitably. The commercial launch of any vaccine product candidate is subject to significant risks including, but not limited to, manufacturing scale-up and market acceptance. We may not generate sufficient product revenue to become profitable or generate positive cash flow. We continue to fund our operations through the sales of our common stock. We terminated our previous At Market Issuance Sales Agreements entered into in 2009 with Wm Smith & Co. and entered into a new sales agreement with McNicoll, Lewis & Vlak LLC (“MLV”), as sales agent, under which we may sell an aggregate of $50 million. Our Board of Directors has authorized the sale of up to 25 million shares of our common stock pursuant to this agreement. Since entering into the agreement with MLV on March 15, 2010 and through August 5, 2010, we have sold 7.5 million shares of our common stock for aggregate net proceeds of $16.6 million.

Recent Accounting Pronouncements Not Yet Adopted

In September 2009, ASU 2009-13, Revenue Recognition (Topic 605)— Multiple-Deliverable Revenue Arrangements, was issued and will change the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. Specifically, this guidance amends the criteria in Subtopic 605-25, Revenue Recognition — Multiple-Element Arrangements, for separating consideration in multiple-deliverable arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) estimates. This guidance also eliminates the residual method of allocation and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. In addition, this guidance significantly expands required disclosures related to a vendor’s multiple-deliverable revenue arrangements. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The impact of ASU 2009-13 on our consolidated financial statements will depend on the nature and terms of our revenue arrangements entered into or materially modified after the adoption date. However, based on our current customer arrangements, we do not believe the adoption of this ASU will have a material impact on our consolidated financial statements.

In March 2010, ASU 2010-17, Revenue Recognition—Milestone Method (Topic 605) : Milestone Method of Revenue Recognition—a consensus of the FASB Emerging Issues Task Force , was issued and will amend the accounting for revenue arrangements under which a vendor satisfies its performance obligations to a customer over a period of time, when the deliverable or unit of accounting is not within the scope of other authoritative literature and when the arrangement consideration is contingent upon the achievement of a milestone. The amendment defines a milestone and clarifies whether an entity may recognize consideration earned from the achievement of a milestone in the period in which the milestone is achieved. This amendment is effective on a prospective basis for milestones achieved on or after January 1, 2011, with early adoption permitted. The amendment may be applied retrospectively to all arrangements or prospectively for milestones achieved after the effective date. We expect to prospectively apply the amended guidance to milestones achieved on or after January 1, 2011. The new guidance is consistent with our current revenue recognition policies for arrangements with milestones. As a result, we do not believe the adoption of this ASU will have a material impact on our consolidated financial statements.

Results of Operations

The following is a discussion of the historical consolidated financial condition and results of operations of the Company and its wholly owned subsidiary and should be read in conjunction with the consolidated financial statements and notes thereto set forth in this Quarterly Report.

Three Months Ended June 30, 2010 and 2009 (amounts in tables are presented in thousands, except per share information)

Revenue:

	Three Months Ended June 30,
	20 10		200 9		Change 2009 to 20 10
Revenue:
Total revenue	$	7	$	29	$	22

Revenue for the three months ended June 30, 2010 and 2009 was less than $0.1 million. Revenue is comprised of services performed under contracts with United States government agencies.

Operating Expenses:

	Three Months Ended June 30,
	2010		2009		Change 2009 to 2010
Operating Expenses:
Research and development	$	6,327	$	5,297	$	1,030
General and administrative		3,148		2,562		586
Total operating expenses	$	9,475	$	7,859	$	1,616

Research and Development Expenses

Research and development expenses increased to $6.3 million for three months ended June 30, 2010 from $5.3 million for the same period in 2009, an increase of $1.0 million, or 19%, primarily due to higher research and development spending to support our clinical trials related to our H1N1 and seasonal influenza product candidates. The increase is primarily a result of increased employee and outside-testing costs (including outsourced clinical trial costs, sponsored research and consulting agreements).

General and Administrative Expenses

General and administrative expenses increased to $3.1 million for the three months ended June 30, 2010 from $2.6 million for the same period in 2009, an increase of $0.5 million, or 23%, primarily due to increased employee costs.

Other Income (Expense):

	Three Months Ended June 30,
	20 10			200 9			Change 2009 to 20 10
Other Income (Expense):
Interest income	$	44		$	75		$	(31	)
Interest expense		(2	)		(326	)		324
Impairment of short-term investments		—			(459	)		459
Total other income (expense)	$	42		$	(710	)	$	752

We had total other income of less than $0.1 million for the three months ended June 30, 2010 compared to total other expense of $0.7 million for the same period in 2009, a change of $0.8 million. Interest expense decreased $0.3 million to less than $0.1 million for the three months ended June 30, 2010 from $0.3 million for the same period in 2009 as a result of the payment of our convertible notes in 2009. In the three months ended June 30, 2009, we recorded an impairment of $0.5 million relating to our auction rate securities.

Net Loss:

	Three Months Ended June 30,
	2010			2009			Change 2009 to 2010
Net Loss:
Net loss	$	(9,426	)	$	(8,540	)	$	(886	)
Net loss per share	$	(0.09	)	$	(0.10	)	$	0.01
Weighted shares outstanding		100,694			84,832			15,862

Net loss for the three months ended June 30, 2010 was $9.4 million, or $0.09 per share, as compared to $8.5 million, or $0.10 per share, for the same period in 2009, an increased net loss of $0.9 million. The increased net loss was primarily due to higher research and development spending to support our clinical trials related to our H1N1 and seasonal influenza product candidates, as well as increased general and administrative expenses relating to employee costs. These increases were partially offset by reduced total other income (expense) in the three months ended June 30, 2010.

The increase in weighted shares outstanding for the three months ended June 30, 2010 is primarily a result of sales of our common stock through direct stock offerings, in an underwritten public offering and under our At Market Issuance Sales Agreements.

Six Months Ended June 30, 2010 and 2009 (amounts in tables are presented in thousands, except per share information)

Revenue:

	Six Months Ended June 30,
	20 10		200 9		Change 2009 to 20 10
Revenue:
Total revenue	$	117	$	50	$	67

Revenue for the six months ended June 30, 2010 was $0.1 million as compared to less than $0.1 million for the same period in 2009. Revenue is comprised of services performed under contracts with United States government agencies.

Operating Expenses:

	Six Months Ended June 30,
	2010		2009		Change 2009 to 2010
Operating Expenses:
Research and development	$	15,356	$	9,563	$	5,793
General and administrative		5,683		5,454		229
Total operating expenses	$	21,039	$	15,017	$	6,022

Research and Development Expenses

Research and development expenses increased to $15.4 million for six months ended June 30, 2010 from $9.6 million for the same period in 2009, an increase of $5.8 million, or 61%, primarily due to higher research and development spending to support our clinical trials related to our H1N1 and seasonal influenza product candidates. The increase is primarily a result of increased employee and outside-testing costs (including outsourced clinical trial costs, sponsored research and consulting agreements).

General and Administrative Expenses

General and administrative expenses were relatively unchanged at $5.7 million for the six months ended June 30, 2010 as compared to $5.5 million for the same period in 2009, an increase of $0.2 million, or 4%.

Other Income (Expense):

	Six Months Ended June 30,
	20 10			200 9			Change 2009 to 20 10
Other Income (Expense):
Interest income	$	88		$	180		$	(92	)
Interest expense		(4	)		(764	)		760
Impairment of short-term investments		—			(1,338	)		1,338
Total other income (expense)	$	84		$	(1,922	)	$	2,006

We had total other income of $0.1 million for the six months ended June 30, 2010 compared to total other expense of $1.9 million for the same period in 2009, a change of $2.0 million. Interest expense decreased $0.8 million to less than $0.1 million for the six months ended June 30, 2010 from $0.8 million for the same period in 2009 as a result of the payment of our convertible notes in 2009. In the six months ended June 30, 2009, we recorded an impairment of $1.3 million relating to our auction rate securities.

Net Loss:

	Six Months Ended June 30,
	2010			2009			Change 2009 to 2010
Net Loss:
Net loss	$	(20,838	)	$	(16,889	)	$	(3,949	)
Net loss per share	$	(0.21	)	$	(0.22	)	$	0.01
Weighted shares outstanding		100,442			76,807			23,635

Net loss for the six months ended June 30, 2010 was $20.8 million, or $0.21 per share, as compared to $16.9 million, or $0.22 per share, for the same period in 2009, an increased net loss of $3.9 million. The increased net loss was primarily due to higher research and development spending to support our clinical trials related to our H1N1 and seasonal influenza product candidates, partially offset by reduced total other income (expense) in the six months ended June 30, 2010.

The increase in weighted shares outstanding for the six months ended June 30, 2010 is primarily a result of sales of our common stock through direct stock offerings, in an underwritten public offering and under our At Market Issuance Sales Agreements.

Liquidity Matters and Capital Resources

Our future capital requirements depend on numerous factors including, but not limited to, the commitments and progress of our research and development programs, the progress of pre-clinical and clinical testing, the time and costs involved in obtaining regulatory approvals, the costs of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights and manufacturing costs. We plan to continue to have multiple product candidates in various stages of development, and we believe our research and development, as well as general and administrative expenses and capital requirements will fluctuate depending upon the timing, scope and progress of our pre-clinical studies and clinical trials and other research and development activities.

As of June 30, 2010, we had $9.4 million in cash and cash equivalents and $17.3 million in short-term investments as compared to $38.8 million and $4.2 million, respectively, at December 31, 2009. The following table summarizes cash flows for the six months ended June 30, 2010 and 2009 (in thousands):

	Six Months Ended June 30,
	2010			2009			Change 2009 to 2010
Summary of Cash Flows:
Net cash (used in) provided by:
Operating activities	$	(18,727	)	$	(14,027	)	$	(4,700	)
Investing activities		(14,011	)		(36	)		(13,975	)
Financing activities		3,427			12,341			(8,914	)
Net decrease in cash and cash equivalents		(29,311	)		(1,722	)		(27,589	)
Cash and cash equivalents at beginning of period		38,757			26,938			11,819
Cash and cash equivalents at end of period	$	9,446		$	25,216		$	(15,770	)

Net cash used in operating activities increased to $18.7 million for the six months ended June 30, 2010 from $14.0 million for the same period in 2009, primarily due to our increased loss, resulting primarily from our higher research and development spending to support our clinical trials related to our H1N1 and seasonal influenza product candidates.

During the six months ended June 30, 2010 and 2009, our investing activities consisted primarily of purchases and maturities of short-term investments and capital expenditures. Capital expenditures for the six months ended June 30, 2010 and 2009 were $0.7 million and $0.2 million, respectively. The increase in capital expenditures was primarily due to the purchase of laboratory equipment relating to our manufacturing scale-up. We purchased short-term investments in the six months ended June 30, 2010 to increase our rate of return on our funds. For 2010, as compared to 2009, we expect our level of capital expenditures to increase modestly.

During the six months ended June 30, 2010, our financing activity consisted primarily of $3.1 million in net proceeds from the sale of our common stock pursuant to our At Market Issuance Sales Agreement with MLV. During the same period in 2009, our financing activity consisted primarily of $24.7 million in net proceeds from sale of our common stock pursuant to a stock purchase agreement and our previous At Market Issuance Sales Agreement that was subsequently terminated, partially offset by payments of our convertible notes. We continue to sell our common stock under our current At Market Issuance Sales Agreement and since June 30, 2010 through August 5, 2010, we have sold an additional 6.2 million shares for $13.5 million in net proceeds.

We have entered into agreements with outside clinical research organization providers to support our clinical development. As of June 30, 2010, $5.5 million remains unpaid on certain of these agreements in the event our outside providers complete their services in 2010. However, under the terms of the agreements, we have the option to terminate, but we would be obligated to pay the provider(s) for all costs incurred through the effective date of termination.

We have licensed certain rights from Wyeth Holdings Corporation (Wyeth) and the University of Massachusetts Medical School (UMMS). The Wyeth license, which provides for an upfront payment, annual license fees, milestone payments and royalties on any product sales, is a non-exclusive, worldwide license to a family of patent applications covering VLP technology for use in human vaccines in certain fields of use; the license may be terminated by Wyeth only for cause and may be terminated by us only after we have provided ninety (90) days notice that we have absolutely and finally ceased activity, including through any affiliate or sublicense, related to the manufacturing, development, marketing or sale of products covered by the license. In May 2010, we amended the license, effective as of March 17, 2010, under which the parties agreed that we would not be obligated to make a milestone payment in the event our H1N1 vaccine product received regulatory approval in the country of Mexico, provided that we increase certain subsequent milestone payments. Payments under the agreement to Wyeth from 2007 through June 30, 2010 aggregated $5.1 million. Based on the clinical and commercial milestones, which could possibly occur through mid-2011, we do not expect to make a milestone payment to Wyeth in the next twelve months. However, it is difficult to predict at this time whether such milestones will be achieved through mid-2011. The UMMS license, which provides for milestone payments and royalties on product sales, is an exclusive worldwide license of VLP technology to develop VLP vaccines for the prevention of any viral diseases in humans. As of June 30, 2010, our payments made to UMMS in the aggregate are not material. Also, we believe that all payments under the UMMS agreement will not be material in the next twelve months.

Based on our cash, cash equivalents and short-term investments balances as of June 30, 2010, anticipated proceeds from the sale of our common stock under our At Market Issuance Sales Agreement and our current business operations, we believe we will have adequate capital resources available to operate at planned levels for at least the next twelve months. Additional capital will be required in the future to develop our product candidates through clinical trials and commercialization. Our ability to raise funds under our At Market Issuance Sales Agreement is subject to market conditions. Further, we will seek additional capital through public or private equity offerings, debt financing, strategic alliance and licensing arrangements, government contracts, collaborative arrangements, or some combination of these financing alternatives. Any capital raised by an equity offering will likely be substantially dilutive to the existing stockholders and any licensing or development arrangement may require us to give up rights to a product or technology at less than its full potential value. We have not secured any additional commitments for new financing nor can we provide any assurance our financing will be available on commercially acceptable terms, if at all. If we are unable to obtain additional capital, we will assess our capital resources and will likely be required to delay, reduce the scope of, or eliminate one or more of our product research and development programs, and/or downsize our organization, including our general and administrative infrastructure.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

The primary objective of our investment activities is to preserve our capital until it is required to fund operations while at the same time maximizing the income we receive from our investments without significantly increasing risk. As of June 30, 2010, we had cash and cash equivalents of $9.4 million, short-term investments of $17.3 million and working capital of $19.1 million.

Our exposure to market risk is primarily confined to our investment portfolio. As of June 30, 2010, our short-term investments are classified as available-for-sale. We do not believe that a change in the market rates of interest would have significant impact on the realizable value of our investment portfolio. Changes in interest rates may affect the investment income we earn on our investments and, therefore, could impact our cash flows and results of operations.

Short-term investments at June 30, 2010 consist of investments in commercial paper, corporate notes and auction rate securities. We had previously invested in auction rate securities for short periods of time as part of our cash management program. The auction rate securities have a par value of $5.1 million and a fair value of $4.1 million. In 2009, we recorded an other-than-temporary impairment charge of $1.3 million related to these securities, which was partially offset by realized gains of $0.8 million relating to redemptions of several auction rate securities. At June 30, 2010, we have $0.7 million in unrealized gains on the auction rate securities in accumulated other comprehensive income on the consolidated balance sheet. These investments are classified within current assets because we may need to liquidate these securities within the next year to fund our ongoing operations.

Interest and dividend income is recorded when earned and included in interest income. Premiums and discounts, if any, on short-term investments are amortized or accreted to maturity and included in interest income. The specific identification method is used in computing realized gains and losses on sale of securities.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the assistance of our Chief Executive Officer and Chief Financial Officer, has reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of June 30, 2010. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives. Based on the evaluation of our disclosure controls and procedures as of June 30, 2010, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated any changes in our internal control over financial reporting that occurred during the second quarter of 2010, and has concluded that there was no change that occurred during the second quarter of 2010 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

Since March 2010, when we initiated legal proceedings against Mr. Mitch Kelly in the state of New York and Dr. Denis O’Donnell in the Commonwealth of Massachusetts for collection of their respective indebtedness due to the Company, we have been actively pursuing these lawsuits and attending to pretrial matters. Mr. Kelly and Dr. O’Donnell are former directors of the Company that have each defaulted on outstanding notes due to the Company in the aggregate principal amount of $1,572,000.

Item 1A. Risk Factors

There are no material changes to the Company’s risk factors as described in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as filed with the SEC, other than as mentioned below.

We may not be awarded a contract with HHS BARDA.

Although we have been notified by HHS BARDA that our response to United States Government RFP solicitation number HHS BARDA-09-32 for a contract award for the advanced development of recombinant influenza vaccines is within the competitive range for award consideration, we may not win a contract with HHS BARDA. A contract with HHS BARDA would also be attractive to our competitors, so we anticipate there to be significant competition in the competitive range for this contract, potentially from companies that have more experience, capital and human resources and overall capabilities than we do. In addition, HHS BARDA may elect to limit a contract or to not award any contract to us for a number of potential reasons including, but not limited to, concerns resulting from unsatisfactory on-site inspections or subsequent technical or business discussions; safety or efficacy issues not seen to date may be encountered before HHS BARDA makes its decision; we have not yet manufactured, or relied on third parties to manufacture, any vaccines at a commercial scale; and HHS BARDA may elect to contract with multiple companies that may or may not include us, and even if we were included in a contract, the amount of the contract could be comparatively smaller than we currently anticipate. Even if we were awarded the contract with HHS BARDA for a comparatively larger amount, such a contract is unlikely to fully address our liquidity issues.

Item 5.

Other Information

The Company entered into an Amendment to its License Agreement with Wyeth, effective as of March 17, 2010, under which the parties agreed that the Company would not be obligated to make a milestone payment in the event its H1N1 vaccine product received regulatory approval in the country of Mexico, provided that the Company agreed to increase certain subsequent milestone payments.

The Company entered into a consulting agreement, effective as of April 1, 2010, with John Lambert, a current member of the Company’s Board of Directors, pursuant to which he acts as a Novavax representative on the board of directors of CPL Biologicals Private Limited, the Company’s joint venture created in 2009 with Cadila Pharmaceuticals Ltd.

Item 6.

Exhibits

Exhibits marked with a single asterisk (*) are filed herewith.

Exhibits marked with a double plus sign (††) refer to management contracts, compensatory plans or arrangements.

Confidential treatment has been requested for portions of exhibits marked with a double asterisk (**).

10.49* **	Amendment No. 1 to License Agreement, effective as of March 17, 2010, between the Company and Wyeth Holdings Corporation

10.50* ††	Consulting Agreement, dated as of April 1, 2010, between the Company and John Lambert

10.51 ††	Employment Agreement of Mark O. Thornton dated May 6, 2010 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed May 25, 2010)

10.52 ††	Employment Agreement of Stanley C. Erck dated as of February 15, 2010 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 1, 2010)

10.53 ††	Amendment to Amended and Restated Employment Agreement of Rahul Singhvi dated May 27, 2010 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed June 1, 2010)

10.54 ††	Employment Agreement of Gregory Glenn dated July 1, 2010 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed July 6, 2010)

31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act

31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act

32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NOVAVAX, INC.

Date: August 6, 2010	By:	/s/ Rahul Singhvi
		President and Chief Executive Officer
		and Director
		(Principal Executive Officer)

Date: August 6, 2010	By:	/s/ Frederick W. Driscoll
		Vice President, Chief Financial Officer
		and Treasurer
		(Principal Financial and Accounting Officer)

Exhibit 10.49

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS

MARKED WITH [**********] AND HAS BEEN FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE COMMISSION.

Amendment No. 1

To the

LICENSE AGREEMENT

This Amendment is effective as of March 17, 2010 and amends the License Agreement dated as of July 5, 2007 (the “Agreement”), by and between Wyeth Holdings Corporation, having a place of business at Five Giralda Farms, Madison, New Jersey 07940 (“Wyeth”), and Novavax, Inc., having its principal place of business at 9920 Belward Campus Drive, Rockville, Maryland 20850 (“Novavax”).

Novavax and Wyeth desire to amend the Agreement as set forth below in connection with the initiation in October 2009 by Novavax of a clinical study of its virus-like particle H1N1 influenza vaccine in Mexico in collaboration with Avimex Laboratories and GE Healthcare (the Product used in such study is referred to as the “H1N1 Product”). Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement.

Each of Wyeth and Novavax hereby agrees as follows:

The H1N1 Product is a Product for Pandemic Flu for purposes of the Agreement. Notwithstanding the provisions of Section 3.1.4 of the Agreement to the contrary but subject to paragraphs 2 and 3 below, no milestone payment shall be due for receipt of [**********] of the H1N1 Product in Mexico for H1N1 influenza, and the milestone payment due within thirty (30) days after [**********] of the H1N1 Product in Mexico for H1N1 influenza shall be [**********].

In the event that the H1N1 Product receives [**********] for H1N1 influenza in Mexico (the “Mexico Trigger Event”), in addition to the royalties payable pursuant to Section 3.1.6 of the Agreement, Novavax shall pay or cause to be paid to Wyeth, pursuant to Section 3.4 of the Agreement, a separate royalty equal to [**********] of all [**********] of the H1N1 Product in Mexico for H1N1 influenza by Novavax or any of its Affiliates or permitted sublicensees (such additional, separate royalty payments are referred to as the “Additional Royalties”) until such time as Novavax and its Affiliates and permitted sublicensees have paid to Wyeth Additional Royalties in the aggregate amount of [**********], subject to paragraph 3 below.

In the event that the H1N1 Product receives [**********] for H1N1 influenza in any jurisdiction other than Mexico at any time after the Mexico Trigger Event when Novavax has paid to Wyeth Additional Royalties pursuant to paragraph 2 above in an aggregate amount less than [**********], Novavax shall, within thirty (30) days after such [**********], pay to Wyeth an amount (the “H1N1 [**********] Makeup Amount”) equal to (a) [**********] minus (b) the aggregate amount of Additional Royalties paid to Wyeth pursuant to paragraph 2 above through the date of such [**********]. Upon payment of the H1N1 [**********] Makeup Amount, Novavax and its Affiliates and permitted sublicenses shall have no further obligation to pay any Additional Royalties to Wyeth.

Nothing herein shall affect the obligations of Novavax, its Affiliates and its permitted sublicensees to make any payments to Wyeth under Section 3.1.3 or 3.1.4 of the Agreement for any Product other than the H1N1 Product or for any indication for the H1N1 Product other than H1N1 influenza.

In all other respects the Agreement shall remain in full force and effect.

IN WITNESS HEREOF, the parties hereto have caused their duly authorized representatives to execute this Amendment No. 1 to the Agreement.

NOVAVAX, INC.		WYETH HOLDINGS
		CORPORATION

By:	/s/ Rahul Singhvi	By:	/s/ Arthur J. Cohn

Name: Rahul Singhvi, Sc.D.		Name: Arthur J. Cohn

Title: President and CEO		Title: Vice President

Exhibit 10.50

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this “Agreement”) is made as of April 1, 2010, by and between Novavax, Inc. (“Novavax”), having a place of business at 9920 Belward Campus Drive, Rockville, Maryland 20850, and John Lambert, residing at Box Cottage, Church Lane, Great Kimble, Aylesbury, Bucks UK HP17 9TH (the “Consultant”).

Consultant and Novavax, intending to be legally bound, hereby agree as follows:

1.	Engagement . Upon the terms and subject to the conditions set forth in this Agreement, Novavax hereby agrees to engage Consultant as an independent contractor, to render services to and on behalf of Novavax and Consultant hereby agrees to render such services to and on behalf of Novavax.

2.	Consultant Services . The Consultant shall provide the services described in Exhibit A (the “Services”).

3.	Provisions of Services – Prior Approval .

3.1

Production of Deliverables . Consultant’s performance of Services shall only include the completion and delivery of deliverables that may be set forth on Exhibit A (“Deliverables”). Novavax shall not be liable to Consultant for the cost of any Deliverables not performed pursuant to Novavax’s request for or assent to the production of such Deliverables in writing.

3.2

Meetings . Consultant shall attend meetings at Novavax or elsewhere pursuant to the written agreement of Novavax and Consultant, identifying the location and timing of the meeting. Novavax shall be liable for Consultant’s fees and related expenses only for attendance at meetings mutually agreed to in writing by both parties.

4.	Fees and Invoicing.

4.1

Fees . In full consideration of the provision of the Services and the obligations undertaken pursuant to this Agreement, Novavax agrees to pay Consultant at the rate of $375 per hour up to the initial 8 hours in a particular day and capped at $3000 per day for any work in excess of 8 hours.

4.2

Expenses . Novavax shall reimburse Consultant for the reasonable transportation costs and related expenses incurred by Consultant in connection with the Services that are approved in advance by Novavax, payable upon receipt of invoice with copies of receipts for such expenses. Novavax will provide reimbursement for legitimate, approved business related expenses. These include business class travel (via British Airways or other similar airlines), meals, hotel, rental car, use of own car, telephone, and other items. Consultant shall submit itemized documentation and receipts to Novavax at the time reimbursement is requested. Such documentation will be audited to ensure that charges are reasonable and customary. Consultant shall bear the cost of all other expenses incurred by Consultant in connection with the performance of the Services, unless otherwise agreed in writing.

4.3

Invoicing . No later than thirty (30) days after the end of each calendar quarter, Consultant shall provide Novavax with an invoice detailing all time spent by Consultant in performing the Services, the expenses incurred by Consultant in connection therewith that were approved by Novavax, and the total amount due to Consultant. The invoices shall provide a narrative description of the activity performed, the time spent by Consultant performing such activities, and shall contain such other information in such detail as Novavax may reasonably request. Subject to the terms and conditions set forth herein, Novavax shall pay all amounts due hereunder, and not disputed in good faith, within thirty (30) days after its receipt of such invoice.

4.4

Relationship of the Parties . The relationship of the Consultant to the Company hereunder is that of independent contractor. Nothing herein shall be deemed to create any partnership, association or joint venture between the parties. Consultant shall not be construed for any purpose to be an employee subject to the control and direction of the Company or any of its affiliates. Consultant shall not be entitled to any of the benefits, coverages or privileges, including, without limitation, social security, unemployment, medical or pension payments, made available to employees of the Company. The Consultant shall have sole responsibility, subject to rules promulgated by the U.S. Internal Revenue Service (the “IRS”), for the proper reporting and payment of any and all applicable U. S. taxes due on payments made to the Consultant by the Company hereunder.

5.	Term and Termination .

5.1

Term and Termination . This Agreement shall commence on the date set forth above and expire twelve (12) months thereafter, unless terminated earlier as set forth in this Paragraph 5.1. Upon mutual written agreement no later than thirty (30) days before the anniversary of the Effective Date, this agreement may be renewed for additional twelve (12) month periods.

(a)

Novavax may terminate this Agreement before its expiration or any specific Services for any reason upon thirty (30) days advance written notice to Consultant.

(b)

Consultant may terminate this Agreement and/or any specific Services if Novavax is in default of any of its material obligations set forth herein, and such breach is not cured within thirty (30) days after Novavax’s receipt of a written notice from Consultant that describes such breach in reasonable detail.

-2-

5.2

Duties Upon Termination . Upon termination of this Agreement for any reason, the Consultant shall promptly deliver to Novavax all Confidential Information and all copies thereof and immediately cease all use of Confidential Information and the Intellectual Work Product.

6.	Confidential Information .

6.1

Without the express prior written consent of Novavax, Consultant shall only use for the purpose of rendering the Services and shall not disclose or use any Confidential Information (as defined below) of Novavax for Consultant’s direct or indirect benefit or the direct or indirect benefit of any third party, and Consultant shall maintain, both during and for seven years after Consultant’s engagement, the confidentiality of all Confidential Information of Novavax. The term "Confidential Information" shall include all information disclosed to Consultant by Novavax including without limitation: trade secrets, know-how, patent applications or patentable improvements thereto, biomedical technology, inventions, writings, blueprints, computer programs, documents, engineering specifications, diagrams, charts, models, research studies, assays, marketing studies, process descriptions, manufacturing processes, projections, information relating to customers, suppliers, distributors, licensees, profits, costs, pricing or tooling, and all other materials or information relating to or dealing with the business operations, technologies or activities of Novavax, whether written, oral, electronic or visual, tangible or intangible, whether machine readable or otherwise and shall also include the existence of any relationship between Novavax and Consultant, including but not limited to the terms of this Agreement and the terms of the engagement by Novavax of Consultant; and all information and materials prepared by Consultant in the course of, relating to or arising out of his engagement by Novavax, or prepared by any other Novavax employee or contractor for Novavax or its customers. Failure to mark any of the Confidential Information as confidential or proprietary shall not affect its status as Confidential Information under the terms of this Agreement.

6.2

At Novavax’s request, Consultant shall immediately: (i) discontinue all use of all Confidential Information; (ii) return to Novavax all materials then in Consultant’s possession or subject to its control that contain Confidential Information, including all copies thereof and all summaries, analyses and notes thereon; (iii) erase or destroy all Confidential Information contained in computer memory or data storage apparatus under the ownership or control of Consultant; and (iv) warrant in writing to Novavax that Consultant has taken all actions described in the foregoing Subparagraphs 6.2(i)-(iii).

6.3

The restrictions set forth in this Section 6 shall not apply to Confidential Information that:

-3-

(a)

is rightfully in the possession of the receiving party prior to the date of the disclosure of such information to the receiving party by the disclosing party;

(b)

is in the public domain prior to the date of the disclosure of such information to the receiving party by the disclosing party;

(c)

becomes part of the public domain by publication or by any other means except an unauthorized act or omission on the part of the receiving party or its employees, consultants or advisors;

(d)

is or was supplied to the receiving party on a non-confidential basis by a third party who is under no obligation to the disclosing party to maintain such information in confidence. Specific information disclosed as part of the Confidential Information shall not be deemed to be in the public domain or in the prior possession of Consultant merely because it is embraced by more general information in the public domain or in the prior possession of Consultant.

6.4

Securities Trading . Consultant further agrees that it will conform in all respects to the securities and trading policies of Company and with the laws and regulations governing activities including, buying, selling or otherwise trading securities of the Company. Consultant shall consult with the Chief Financial Officer of Company as to when such trading shall be permitted.

Property Rights . All work produced hereunder, including, without limitation, all inventions, ideas, creations, designs, discoveries, developments, techniques, expressions, improvements, computer programs, specifications, operating instructions and all other documentation, data or other work product related to the Services provided by the Consultant under this Agreement (whether patentable or subject to copyright, or not), which are first conceived, made or otherwise originated or acquired or first actually constructively reduced to practice during the Term or within six (6) months following the expiration or termination of the Term, whether preliminary or final, and on whatever media rendered (collectively, the “Work Product”), shall be deemed work made for hire and made in the course of services rendered for the Company and shall be the sole and exclusive property of the Company. The Company shall have the sole, absolute and unlimited right throughout the world to protect by patent or copyright, and to make, have made, use, reconstruct, repair, modify reproduce, publish, distribute and sell the Work Product, in whole or in part, or combine the Work Product with other matter, or not use the Work Product at all, as it sees fit. To the extent that title to the Work Product may not be considered work for hire, the Consultant irrevocably agrees to transfer and assign to the Company in perpetuity all worldwide right, title and interest in and to the patent rights, copyrights, trade secrets and other proprietary rights (including, without limitation, applications for registrations thereof) in, and ownership of, the Work Product that the Consultant may have, as and when such rights arise. The Consultant further agrees that it will execute, and will cause its applicable employees to execute, all documents necessary to enable the Company to protect and record its ownership of the Work Product.

-4-

Authority to Contract . The Company represents and warrants to Consultant that the execution and delivery of this Agreement and the performance of the provisions hereof have been duly authorized by all necessary action on its part, that this Agreement has been duly and validly executed and delivered by it, that this Agreement constitutes a valid and legally binding agreement enforceable against it in accordance with its terms. Consultant represents and warrants to the Company that this Agreement has been duly and validly executed and delivered by him or her, that this Agreement constitutes a valid and legally binding agreement enforceable against him or her in accordance with its terms, and that neither the execution and delivery of this Agreement nor the performance of the provisions hereof constitute or will constitute a violation of any contract, or other agreement or relationship to which he or she is a party or by which he or she is bound.

Debarment. Consultant has not been debarred under the provisions of the Generic Drug Enforcement Act of 1992, including without limitation, 21 U.S.C. Section 335a. If at any time during the term of this Agreement Consultant (a) becomes debarred, or (b) receives notice of action or threat of action with respect to its debarment, Consultant shall notify Novavax immediately. In the event that Consultant becomes debarred as set forth above, this Agreement shall automatically terminate upon receipt of such notice without any further action or notice. In the event that Consultant receives notice of action as set forth above, Novavax shall have the right to terminate this Agreement immediately.

10.	Governing Law . This Agreement shall be construed and enforced in accordance with the laws of the State of Maryland, without regard to the conflict of law principles of Maryland or any other jurisdiction.

11.

Equitable Relief . In the event that any provision of Section 6 or 7 shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, said time period and/or areas of restriction shall be deemed to become and thereafter be the maximum time period and/or areas which such court deems reasonable and enforceable. Consultant recognizes and agrees that the Company’s remedy at law for any breach of the provisions of Sections 6 or 7 hereof would be inadequate, and Consultant agrees that for breach of such provisions, the Company shall, in addition to such other remedies as may be available to it at law or in equity or as provided in this Agreement, be entitled to injunctive relief and to enforce its rights by an action for specific performance.

-5-

12.

Miscellaneous . This Agreement and the Exhibit attached hereto (which is incorporated herein by reference) contains the entire agreement and understanding of the parties relating to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of every nature between them. This Agreement may not be changed or modified, except by an agreement in writing signed by both of the parties hereto. The waiver of the breach of any term or provision of this Agreement shall not operate as or be construed to be a waiver of any other or subsequent breach of this Agreement. The obligations of Consultant as set forth herein, other than Consultant’s obligations to perform the Services, shall survive the termination of Consultant’s engagement with Novavax. Novavax may assign this Agreement to, and this Agreement shall bind and inure to the benefit of, any parent, subsidiary, affiliate or successor of Novavax. This Agreement shall not be assignable by Consultant. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

IN WITNESS WHEREOF, the parties have caused this Consulting Agreement to be executed the day and year first above written.

	NOVAVAX, INC.

	By:	/s/ Frederick W. Driscoll
	Name: Frederick W. Driscoll
	Title: Vice President, Chief Financial Officer and Treasurer

	John Lambert:

	/s/ John Lambert

-6-

Exhibit A

Services:

Consultant has agreed to use his best efforts to, in good faith, fairly and accurately represent the Company’s fiduciary interest in the joint venture known as CPL Biologicals Pvt. Ltd. (“CPL-B”), as a Company appointed director to the CPL-B board of directors. Consultant shall reasonably attend any such board meetings whether in person or by telephone or video conferencing, or if unavailable to participate, shall work with Company to provide reasonable notice of such unavailability and work to insure that a Company representative is serving in this capacity. Consultant shall be expected to travel to the CPL-B facility in India at reasonable intervals. In addition, as directed by the Company’s CEO, Executive Chairman, or the Board of Directors, Consultant shall provide such other services based on his experience and expertise to fairly and accurately represent the Company’s fiduciary interest and responsibilities to CPL-B.

-7-

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Rahul Singhvi, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Novavax, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ Rahul Singhvi
	President and Chief Executive Officer

Date: August 6, 2010

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

I, Frederick W. Driscoll, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Novavax, Inc.;

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ Frederick W. Driscoll
	Vice President, Chief Financial Officer and Treasurer

Date: August 6, 2010

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT

TO 18 UNITED STATES C. §1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Novavax, Inc. (the “Company”) on Form 10-Q for the fiscal period ended June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rahul Singhvi, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by this Report.

	By:	/s/ Rahul Singhvi
	President and Chief Executive Officer

Date: August 6, 2010

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER PURSUANT TO 18 UNITED STATES C. §1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Novavax, Inc. (the “Company”) on Form 10-Q for the fiscal period ended June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frederick W. Driscoll, Vice President, Chief Financial Officer and Treasurer, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

	By:	/s/ Frederick W. Driscoll
	Vice President, Chief Financial Officer and Treasurer

Date: August 6, 2010